"According to initial information she was killed by two shots when leaving the lift. Neighbors found her body," a police source told Reuters. Police found a pistol and four rounds in the lift.

Politkovskaya, a 48-year-old mother of two, won international fame and numerous prizes for her dogged pursuit of rights abuses by Putin's government, particularly in the violent southern province of Chechnya.

"The first thing that comes to mind is that Anna was killed for her professional activities. We don't see any other motive for this terrible crime," said Vitaly Yaroshevsky, a deputy editor of the newspaper where Politkovskaya worked.

Moscow chief prosecutor Yuri Syomin told reporters at the crime scene, a nine-story Soviet-era apartment building in central Moscow, that he was treating the death as murder.

Paramedics took Politkovskaya's body, wrapped in a white sheet, out of the building and put it into an ambulance. A middle-aged woman laid flowers at the doors of the building and stood with her head against the wall, crying.

Former Soviet President Mikhail Gorbachev, a shareholder in Politkovskaya's newspaper Novaya Gazeta, called the killing a "savage crime."

"It is a blow to the entire democratic, independent press," Gorbachev told Interfax news agency. "It is a grave crime against the country, against all of us."

In the days before her death, Politkovskaya had been working on a story about torture in Chechnya, which was expected to be published on Monday, her newspaper said.

DISTRUSTED PUTIN

The rebel province has been a constant headache for the Kremlin. Russia sent troops in 1994 to crush an insurgency but after 12 years of bloodshed and the devastation of the province's capital Grozny, sporadic attacks continue.

Politkovskaya was a fierce critic of Putin, whom she accused of stifling freedom and failing to shake off his past as a KGB agent.

"I dislike him for ... his cynicism, for his racism, for his lies ... for the massacre of the innocents which went on throughout his first term as president," she wrote in her book "Putin's Russia" which was published overseas but not in Russia.

Her death came on the day Putin turned 54.

In New York, the Committee to Protect Journalists described Politkovskaya's murder as a "devastating development for journalism in Russia."

There are few independent voices in Russian media, most of it controlled by the state or business interests. Newspapers such as Novaya Gazeta, popular with Russian liberals and human rights activists, are rare, especially outside the big cities and tend to have a small circulation.

"Ms. Politkovskaya's murder signals a major crisis of free expression and journalistic safety in Russia," said Thomas Hammarberg, Council of Europe Commissioner for Human Rights.

Rights group Amnesty International said in a statement it believed Politkovskaya was targeted because she reported on rights abuses in Russia and urged a thorough murder probe.

Born to Soviet Ukrainian diplomats in New York in 1958, Politkovskaya studied journalism at Moscow's State University and began her career in state media.

After the collapse of the Soviet Union she began working at the independent media which began to flourish under Gorbachev.

Politkovskaya's war reporting often meant she was under scrutiny by Russian politicians and, sometimes, the security services. She had been arrested and held in a pit for three days in Chechnya and received numerous death threats.

She said she was unable to cover the bloody siege of a school at Beslan in 2004 -- in which more than 330 children and parents died when troops stormed the school -- because she was poisoned on the flight from Moscow and ended up in hospital.

Her murder is the most high-profile killing of a journalist here since the death of U.S. journalist Paul Klebnikov in 2004.

Last month, gunmen shot and killed senior Russian central banker Andrei Kozlov in one of the most high profile contract killings since Putin came to power in 2000.